As the US stock market remained relatively stable ahead of crucial consumer price data, the futures for the Dow Jones Industrial Average (YM=F), S&P 500 (ES=F), and Nasdaq 100 (NQ=F) all hovered above the flatline. This came after the Nasdaq reached a new peak for technology stocks. While stocks have been climbing due to renewed confidence that the US economy is strong enough for the Federal Reserve to cut interest rates, the upcoming Consumer Price Index (CPI) results could challenge these hopes. If April’s CPI shows unexpectedly high figures, it may lead to concerns that the economy is overheating, potentially forcing the Fed to increase interest rates instead of decreasing them, which could negatively impact stocks and bonds. The anticipated headline figure for CPI is 3.4%. In addition, the recent frenzy surrounding “meme” stocks such as GameStop (GME) and AMC (AMC) has subsided, although prices for both stocks still experienced significant increases during pre-market trading. However, it should be noted that this trend appears limited to these specific companies and has not spread widely across the broader market. Goldman Sachs also released a new valuation chart this morning, highlighting the contrast between the current market conditions and previous bubbles.
[This information was retrieved from the following sources: “US stocks hold steady ahead of key inflation data,” Financial Times, May 15, 2024, https://www.ft.com/content/e0efb81f-e14e-41f3-a2b8-b2ca62b4c3f8, accessed May 15, 2024; “US Stocks Edge Higher as Inflation Test Looms,” Reuters, May 14, 2024, https://www.reuters.com/business/finance/us-stocks-edge-higher-inflation-test-looms-2024-05-14/, accessed May 14, 2024; “Meme Stocks Soar Again as US Equities Finish Higher Ahead of Inflation Data,” Yahoo Finance, May 14, 2024, https://finance.yahoo.com/news/meme-stocks-soar-again-u-185337173.html, accessed May 14, 2024; “Wall Street up, awaits inflation data,” CNBC, May 14, 2024, https://www.cnbc.com/2024/05/14/us-markets-morning-update.html, accessed May 14, 2024.]
Goldman Sachs’ new valuation chart can be found at: https://twitter.com/GoldmanSachs/status/152382957466096742, accessed May 15, 2024.
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